Near-term outlook on China’s steel products

• Rebar tags may rise as downstream demand recovers
• HRC prices to move up, traders’ stocks at 1-month low

Mysteel: Below is the brief near-term outlook for five key steel products Mysteel shares on a weekly basis, drawing upon the results of related surveys and communication with Chinese market participants.

Rebar, wire rod: Prices of these two long steel products are expected to strengthen over 17-21 March, mainly due to macro policy support and faster destocking of inventories at traders’ warehouses amid the continuous recovery in downstream demand.

The spot trading volume of rebars, wire rods, and bars-in-coil among the 237 trading houses across China under Mysteel’s tracking gained by 9.2% or 9,261 tonnes (t)/day w-o-w to average 110,379 t/d over 10-14 March.

Hot-rolled coil: Prices are likely to move up in the week through 21 March. A North China-based source said both production and demand of hot-rolled coils (HRCs) have increased recently, lending some support to prices.

As of 13 March, HRC stocks held among traders in 33 cities Mysteel monitors nationwide sat at a one-month low of 3.32 million tonnes (mnt), down by 2.6% or 89,900 tonnes (t) from a week earlier.

Cold-rolled coil: Prices may rise narrowly in the week ending 21 March, with both cold-rolled coil (CRC) output and demand staying largely stable. Some traders remain cautious about the near-term market outlook despite favourable signals from the macroeconomic side recently.

CRC output among the 29 steelmakers that Mysteel follows across the country is expected to hover around 840,000-850,000 t this week.

Medium plate: Prices may be range-bound during 17-21 March. A source in South China’s Guangdong province told Mysteel Global that local spot prices of medium plates will be propped up by falling inventories and limited arrivals of new supplies.

Production of medium plates among the 37 steel mills Mysteel checks in China declined for the second week last week, down by 1.2% or 17,000 t w-o-w to total 1.44 mnt over 6-12 March, marking a four-month low.

Sections: Sections’ prices are projected to rise this week, though with limited upward momentum. Demand for sections may increase with end-users’ cash flow improving, while output may continue to be high as re-rollers and integrated steel mills in Hebei ramp up production after the lifting of previous curbs.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.